FTA took effect on December 20 after both sides wrap up necessary procedures.
The Vietnam - South Korea Free Trade Agreement (VKFTA) officially came into effect on December 20.
According to the Ministry of Industry and Trade (MoIT), after the two signed the agreement in Hanoi on May 5 they began to urgently implement internal approval procedures and have now completed the task.
On December 16 the Ministries of Foreign Affairs exchanged diplomatic notes on the effective date of the agreement - December 20.
The two sides will establish a ministerial level joint committee and subcommittees on trade, customs, trade defense, sanitary and phytosanitary (SPS) measures, and technical barriers to trade (TBT), to accelerate the implementation of the agreement.
Bilateral trade between Vietnam and South Korea has increased tremendously since 1992, from a mere $500,000 to $28.8 billion in 2014, when South Korea became Vietnam’s third-largest trade partner, following China and the US, while Vietnam is now South Korea’s sixth-largest export market.
Two-way trade recorded an increase of 5.7 per cent in 2014 against 2013, with Vietnam’s exports at $7.1 billion, up 7.9 per cent, and its imports at $21.7 billion, up 5 per cent. According to the General Department of Customs, in the first eleven months of this year bilateral trade hit $33.6 billion, a year-on-year increase of 27.6 per cent.
South Korea is now the largest of the 105 countries and territories investing in Vietnam, with 4,777 projects worth $43.6 billion as at October 20, according to the Ministry of Planning and Investment. Projects are primarily found in manufacturing and processing, real estate, retail and wholesale, and construction, with total investment exceeding $5 billion. It also has nearly 3,000 enterprises in Vietnam and employs more than 400,000 workers.